French union calls off potentially-damaging pilots' strike

A potentially-damaging French pilots' strike has been called off at the last minute, the union organising the work stoppage said Friday, just days after Air France warned it risked hampering the airline's painstaking recovery.

The strike from May 3 to 30, which was called by the country's main SNPL pilots' union, would have seen pilots stop work at specific times every day, which Air France said would severely disrupt its medium- and long-haul flights.

On Friday, SNPL head Yves Deshayes said the union had decided to call off the strike "on the basis of (government) proposals" after representatives met with Transport Minister Frederic Cuvillier -- a move welcomed by Air France chief Frederic Gagey.

The pilots had planned to protest against a law stipulating that those who strike must declare their intention to do so 48 hours before the start of a work stoppage.

The regulation was put in place to give airlines more time to warn passengers about flight disruptions, but the SNPL says it actually allows them to hire temporary replacement pilots from other European countries.

"The government recognised for the first time that these practices were not acceptable," Deshayes told reporters Friday, adding the government had made "a strong commitment" on looking to modify the law, although "no guarantees" had been given to the union.

Earlier this week, Air France chief Gagey had warned that the strike -- which had nothing to do with the airline itself -- was "taking place at a crucial time in Air France's recovery".

After six years of financial losses that led to radical cost-cutting measures including thousands of job cuts, the airline is aiming to generate a positive operating income this year -- a target it said could have been damaged by the strike.

On Friday, Gagey welcomed the cancellation of the strike, saying it was "excellent news for Air France clients and employees".

"Air France can now devote all its energy to pursuing its recovery."

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Third year of losses for Tigerair

Budget airline Tigerair is in the red for the third straight year and the losses are widening.

It posted a net loss of S$95.5 million for the fiscal fourth quarter ended on March 31.

This brings its losses for the full year to S$223 million, a sharp jump from the S$45.4 million losses a year ago.

Tigerair says the higher losses were largely due to exceptional charges and losses of associate and joint ventures.

Operating losses amounted to S$24.2 million for the quarter. It is the fourth straight quarter that the firm reported operating losses.

Given the uncertain market conditions, the airline says it is reviewing its investment in its Indonesian arm, Tigerair Mandala.

Share of loss from Tigerair Mandala amounted to S$16.1 million for the quarter.

Looking ahead, Tigerair expects yield and load factors to remain under pressure amid an oversupply of capacity in the region.

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Malaysia’s new budget airport takes off

The Kuala Lumpur International Airport 2 (klia2), which Malaysia calls the world's largest purpose-built low-cost terminal for low cost carriers, officially commenced operations on Friday with the arrival of Malindo Air Flight OD1027 from Kota Kinabalu at 12.05am.

The first aircraft to take off from the airport was a Cebu Pacific Airways flight (Flight 5J502) to Manila with time of departure of 3.15am.

Present at the airport to witness the historic moment were Deputy Transport Minister Abdul Aziz Kaprawi, Malaysia Airports Holdings Bhd (MAHB) chairman Dr Wan Abdul Aziz Wan Abdullah, MAHB managing director Bashir Ahmad and Department of Civil Aviation (DCA) director general Azharuddin Abdul Rahman.

'Goodie bags' distributed to the 110 passengers of the Malindo Air flight were also given to the 147 passengers on the Cebu Pacific Airways flight.

Earlier at 10.20pm on Thursday, the check-in process began and proceeded without any hitches.

The first passenger to check in, Gemma Camarinta, 39, who was travelling to her hometown in Bohol, Philippines said she was happy and excited to be part of the historical event.

A frequent user of the previous Low Cost Carrier Terminal (LCCT), she said the new hub was more comfortable, and easier to reach where one could use the Express Rail Link (ERL) straight to the terminal.

Another passenger, Ace Perez, 30, said compared to the LCCT, klia2 was much better because it was spacious, comfortable and clean.

"I like the route because it is easily reached from the highway. I am happy with this new building compared to LCCT because there, I had to walk very far to get to the aircraft," he said.

Meanwhile, MAHB in a statement said airlines starting to operate from klia2 on Friday were Malindo Air, Cebu Pacific Airways, Lion Air and TigerAir while AirAsia will move to klia2 by May 9.

MAHB expects 7,000 passenger traffic movements daily for the initial phase of operations, and 50,000 passenger traffic movements from May 9 onwards.

Gatewayklia2, which duals as a public transportation hub that has a fully gated car park which can accommodate 6,000 vehicles, ERL, taxi and bus service, and retail mall of 350,000 sq ft with over 200 outlets also commercially opened to the public on Friday, according to the statement.

MAHB said the LCCT will cease operations after May 9, and for the convenience of passengers, complimentary shuttle bus service between klia2 and LCCT will be provided from May 1 until May 15, and is available every 15 to 20 minutes.

The immigration, security and customs counters at LCCT will also continue to operate until May 9, and passengers are advised to contact their respective airlines to confirm details of their flights to avoid any inconveniences.

The klia2 is designed to handle 45 million passengers a year, replacing the LCCT which had a capacity for only 15 million passengers a year.

At a press conference after the arrival of the Malindo Air flight, Abdul Aziz said the opening of the terminal went very smoothly and as planned.

"We have proven that everything would proceed as scheduled as we had announced before. We are proud as this (klia2) has become the latest Malaysian icon," he said.

Abdul Aziz said the cost of the terminal was within the RM4 billion budget which had been allocated earlier, and that a total of 22 million passengers were expected to use the terminal this year.

He said the government was optimistic that more airlines would want to set up their operations there in the future.

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Cathay Pacific to relocate to Changi Airport T4

The Hong Kong-based carrier Cathay Pacific has announced that it will relocate from Changi Airport’s Terminal 1 to the newest Terminal 4 (T4) when it opens in 2017, becoming the first airline to confirm such a move.

In a joint release today (April 30), the Changi Airport Group (CAG) and the airline said some of the key highlights for its passengers at T4 will include an enhanced travel experience with a line-up of self-service initiatives, as well as an expanded dedicated lounge of more than 800sqm for its premium passengers.

Changi Airport’s latest terminal, T4, is designed to handle 16 million passenger movements per annum and is able to support operations for both full-service and budget carriers.

With more than 130 weekly flights to and from Changi Airport, Cathay Pacific’s relocation to the new terminal will also provide it with “good room for future growth”, said the statement.

Mr Wilson Yam, General Manager, Southeast Asia, Cathay Pacific Airways, said: “As a keen adopter of technology aimed at improving passenger experience, self check-in options have always been offered by Cathay Pacific at all our stations. Changi Airport is one of Cathay Pacific’s largest bases outside Hong Kong so we are very excited at this opportunity to offer a transformational on-ground product for our valued passengers.”

CAG’s Executive Vice President of Air Hub and Development, Mr Yam Kum Weng, said the group is “delighted with Cathay Pacific’s acceptance of our invitation to relocate its operations to T4” and looks forward to a close partnership with the airline at T4 come 2017.

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Malaysia opens new budget airport on Friday

Malaysia this week opens what it calls the world's largest airport built specifically for low-cost airlines, a project driven by budget travel's phenomenal growth but which debuts under the shadow of missing flight MH370.

The $1.2 billion facility near the main Kuala Lumpur International Airport (KLIA) was originally targeted to open three years ago but has been hit by repeated delays, amid concerns over safety and subpar construction, even as costs have doubled.

But the new KLIA2 budget terminal will begin operations Friday with an initial 56 flights, increasing the load as airlines move full operations over from a nearby existing facility in coming days.

Analysts and the travelling public agree the opening of a new budget terminal is long overdue.

The current low-cost terminal is a cramped and bare-bones facility that resembles a bus station. Capacity is 15 million passengers, but about 22 million squeezed through last year.

The gleaming KLIA2 meanwhile covers an area equal to 24 football fields, authorities said, about four times the size of the facility it is replacing.

Its modern design features soaring ceilings, natural lighting, people-mover belts and improved connectivity with access to an existing express airport train to Kuala Lumpur 50 kilometres (31 miles) away.

Malaysia-based Malindo Air, the Philippines' Cebu Pacific Air, Singapore's Tiger Airways, and Indonesia's Lion Air and Mandala Airlines will begin initial operations there Friday.

Regional low-cost leader AirAsia plans to join them by May 9, when the old terminal is due to close.

About 24 million passengers are expected to pass through KLIA2 in the first 12 months, and annual capacity is 45 million. Current capacity at the main KLIA terminal is roughly 40 million, but expansion plans are in the works.

"KLIA2 will cement Kuala Lumpur's position as a thriving hub for both low-cost and full-service travel," said Bashir Ahmad, managing director of state-linked airport operator Malaysia Airport Holdings Berhad (MAHB) which built KLIA2.

Kuala Lumpur has been at the core of a regional budget-travel boom credited in large part to Malaysia-based AirAsia.

The once-failing airline was acquired in 2001 by outspoken Malaysian entrepreneur Tony Fernandes.

He quickly turned it into one of the aviation industry's biggest success stories, its rapid regional growth helping to broaden a market that has benefited a host of Asian competitors.

"AirAsia is the driving force behind this growth because of its size and its ability to attract travellers with its price-sensitive tickets," said Shukor Yusof, an aviation analyst with Malaysia-based Endau Analytics.

"KLIA2 will serve as a catalyst to propel air travel in Asia, which is experiencing robust growth."

But the still-unexplained March 8 disappearance of Malaysia Airlines flight MH370, which took off from the main KLIA, has raised worldwide concern over Malaysian aviation and focused attention on KLIA2's problems.

Its delays and rising costs triggered an ongoing inquiry by a parliamentary committee and accusations last month by impatient AirAsia officials of "many concerns, especially on functionality, safety and security."

These included depressions on runways and taxiways, said the airline, which threatened not to move in. MAHB has acknowledged KLIA2 is on unstable ground that will require years of upkeep.

Malaysia's government is accused of presiding over a crony capitalist system often blamed for frequent problems and unexplained cost overruns in big projects.

Fernandes has previously accused the government of favouring loss-making flag carrier Malaysia Airlines over profitable rivals like AirAsia.

But AirAsia agreed in mid-April it would move over to KLIA2 after the government said the International Civil Aviation Organisation (ICAO) would inspect the facility.

Malaysia said last week ICAO approval was given.

"I would like to confirm that KLIA2 is safe," Transport Minister Hishammuddin Hussein told reporters last week.

Fernandes declined comment.

Shukor said the Asian budget-travel segment had roughly tripled over the past decade to about 50-70 million passengers in 2013, or about 20 percent of regional air traffic.

The expanding Asian middle class means the market can expect further "robust growth of up to 10 percent annually, especially with the launch of KLIA2."

Pushing a baggage trolley, Agnes Tay, 33, a financial manager for Adidas who was among volunteers in a recent KLIA2 trial run, called the terminal "a breath of fresh air."

"It is clean and I feel safe. It will make me fly more often," Tay said.

Malaysia hopes KLIA2 will help increase and broaden the flow of tourists to the country. Nearly 26 million came in 2013, the vast majority driving over from neighbouring Singapore.

MH370 has cast a cloud over hopes of increasing fast-growing arrivals from China, Malaysia's third-largest source of tourists.

Two-thirds of the 239 people on MH370 were from China and tens of thousands of Chinese have cancelled plans to visit.

But analysts said long-term effects are not expected.

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Japan airlines post falling profits on high fuel costs

Japan's two biggest airlines said Wednesday that their full-year net profit had tumbled despite higher demand for air travel, blaming high fuel costs for shrinking their bottom line.

All Nippon Airways (ANA) took the biggest hit with its operator saying that net profit nosedived by 56 per cent to 18.89 billion yen ($185 million) in the fiscal year to March.

Revenue, however, came in at a record 1.60 trillion yen, up from 1.48 trillion yen in the previous 12 months, "helped by a gradual recovery in the Japanese economy", ANA Holdings said.

ANA's biggest domestic rival Japan Airlines said its fiscal year net profit slipped 3.2 per cent, and warned that earnings this year would also stumble.

The carrier said it booked a 166.25 billion yen net profit in the year to March, down from 171.67 billion yen a year earlier, while revenue ticked up to 1.31 trillion yen from 1.24 trillion yen.

For the current year to March 2015, JAL forecast that net profit would come in lower at 115.0 billion yen.

"The escalation of fuel costs due to the weak yen may prevail and competition may intensify in both international and domestic markets," it said.

A sharp drop in the yen, while giving a boost to Japanese exporters, has hurt the country's airlines by pushing up the cost of fuel, often a carrier's single biggest expense.

The yen has lost about a quarter of its value against the dollar since late 2012 following a policy blitz launched by Japanese premier Shinzo Abe and his hand-picked team at the Bank of Japan, aimed at kickstarting economic growth and beating deflation.

ANA said its fuel costs jumped 22 per cent from a year earlier, as it forecasted a net profit of 35 billion yen on revenue of 1.7 trillion yen in the current year to March.

A recovery in demand for flights on Chinese routes has been one bright spot after a longstanding Tokyo-Beijing territorial dispute erupted anew in late 2012, sparking a consumer boycott of Japanese brands that hurt firms for months.

Relations remain tense, but Japanese companies have reported that sales are returning to pre-dispute levels.

"The business on Chinese routes remains fragile," Mitsuru Miyazaki, analyst at SMBC Friend Securities in Tokyo, told AFP.

"The diplomatic factor may also weigh on Japanese travellers' interest in China. Looking ahead, the domestic economic recovery as well as an expansion of slots for international flights should be positives for the current year."

Both ANA and JAL have been working to recover from the global grounding of Boeing's 787 Dreamliner last year.

The pair are the US-based firm's biggest customers for the state-of-the-art plane, which only resumed flying after a months-long grounding -- caused by a series of battery problems -- forced the cancellation of hundreds of flights.

The firms are also fighting off increasing competition from a handful of low-cost carriers that have sprung up in recent years in a market they have long dominated.

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Plane lands safely in Australia after engine fire

A passenger plane carrying 93 people landed safely at Perth Airport on Tuesday despite a dramatic midair engine fire shortly after take-off, officials said.

No one was hurt during the scare on the Cobham Aviation jet bound from Perth for Barrow Island in Western Australia, but some passengers panicked.

"Fuel starting spewing out, caught alight, there was a bit of panic on board but the pilots were quite quick to react and cut fuel lines and then put it out," Jason Grimmett, who was on the plane, told the Australian Broadcasting Corporation.

"So we just turned around and came back in."

Grimmett said most of those on board remained calm as the four-engine plane returned to the terminal, but not all.

"There was a couple of guys that were panicking quite bad but we've still got three other engines, so unless something major goes wrong, just a bit of fuel caught alight," he said.

A spokeswoman for the government agency Airservices Australia told AFP there was a fire in the number two engine shortly after departure.

"The pilot shut it down, the flames were extinguished and the plane returned to Perth," she said.

"It landed safely and was able to taxi to its gate. The fire services provided an escort on the ground."

Witnesses on the ground said they saw flames billowing from an engine of the British Aerospace 146 jet while it was in the air and feared the worst.

"As soon as it got up over the buildings, I could see a 20 metre or 30 metre trail of red and white smoke coming from the left-hand engine," said a caller to local radio station 6PR, identified only as Gary.

"It was climbing at the time and it just looked terrible, it looked like it was going to be a disaster."

The airline is a charter company servicing regional Western Australia.

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